N.Y. Democrat warns of ‘deceptive’ marketing

Source: Christa Marshall, E&E reporter • Posted: Friday, June 10, 2016

Rep. Yvette Clarke (D-N.Y.) sent a letter to the Federal Trade Commission this week warning of a “growing problem” of deceptive marketing practices by segments of the solar industry.

FTC is holding a workshop on June 21 examining competition and consumer protection issues with solar power, including a discussion of how consumers make decisions on solar installations.

In the letter, Clarke thanked FTC for the meeting and cited a “dramatic increase in consumer complaints about abusive or deceptive acts and practices in solar sales, marketing and financing.” She pointed to consumer advisories in several states and class-action lawsuits in Louisiana, California and Nevada. In October, for example, Mississippi’s attorney general released an alert warning of some unethical businesses in the solar market.

Clarke raised concerns about the power purchase agreements and leasing arrangements that are common with rooftop solar installations. The “consumer takes all of the financial risks inherent in these long-term deals,” she wrote.

“With the sharp increase in leasing arrangements, there has been a surge in aggressive sales tactics being used by third party developers/installers. No-money-down solar leases are being aggressively marketed to homeowners through door-to-door sales forces, direct mailers, and on-line advertisements. Too many times the marketing misleads customers by suggesting that solar is free and failing to explain the need to continue to rely on the utility system,” the letter said.

Clarke urged FTC to establish a “regulatory framework” ensuring consumers have minimum standards. For example, she pushed for a requirement that solar leasing firms disclose the overall costs of systems just as lenders are required to do with credit under the federal Truth in Lending Act.

In a brief interview, a Clarke aide said the congresswoman is “pro solar and pro renewable.”

“We just wanted to make sure people aren’t getting taken advantage of,” the aide said.

In a statement, Solar Energy Industries Association Interim President Tom Kimbis said the “letter cries wolf without informing readers about the successful and proactive federal, state and industry efforts underway to ensure a positive solar buying experience.”

He said SEIA has a suite of tools offering advanced consumer protections, including a guide that “arms customers with the tough questions they need to ask before going solar” and a solar business code “applauded by federal and state regulators.”

“Our residential disclosure forms already in the market address line by line all the concerns” raised by Clarke, he said.

“Solar companies rely on word of mouth to succeed. They have every incentive to educate their customers. And that’s why there have been so few consumer complaints against solar. … We look forward to discussing this issue along with other potentially anti-competitive tactics” at the upcoming FTC meeting, he said.

Kimbis also responded to a Politico report that the Edison Electric Institute may have been involved in an earlier draft of the letter, saying, “if true, it’s unfortunate that EEI has decided to use misleading tactics.”

Jeff Ostermayer, director of media relations at EEI, did not respond to Clarke’s letter specifically but suggested the institute is talking to multiple members of Congress about the issue.

“Following the announcement of the FTC workshop on solar power consumer protection issues, we are providing information to policymakers seeking feedback on consumer problems and consumer protection policy issues raised by the workshop,” he said in an email.

The Clarke aide said that her office reached out to multiple “industry experts,” including a lobbying firm, but said it’s not the case that EEI solely authored the letter. “The congresswoman is happy to put her name on this letter,” the aide said.